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Monday, September 9, 2013

Developer outlook positive, landed property dwindling

Developer outlook positive, landed property dwindling

BY SB TOH

KUALA LUMPUR: Property prices are not getting cheaper, sales remain robust, locals far outstrip foreigners in purchases, and the number of landed property coming on the market is declining as strata properties trend upwards – these are some of the patterns revealed by a survey of the first six months of 2013 by the Real Estate and Housing Developers’ Association (Rehda) indicated.

According to the survey, which saw the participation of 150 out of the 1,030 Rehda members, 59% of respondents reported similar or improved sales in the first of 2013 compared to the second half of 2012.

The outlook for the second half is also positive, with more respondents launching projects and more units being launched.

While the first six months saw a total of 10,985 units of property launched, the following six will see the number climbing to 18,181 units.

POPULARITY & TRENDS

The most popular areas in the Klang Valley are 1) Puchong, 2) Cheras, 3) Kota Damansara, 4) KLCC, and 5) Shah Alam.

The Top 3 residential units by type were 1) 2-3-storey terrace houses (3,104 units), 2) serviced apartments (2,208), and 3) condominium/ apartments (1,863). However, condos/apartments (6,689) will nudge terrace houses (2,920) to second place in the second half, with serviced apartments in third (2,436).

In terms of trends, the penchant right now is for 1) properties with smaller, affordable units, 2) more green features in housing, 3) higher density of high-rise development, and 4) niche developments with multi-use zones.

PRICE

What’s not so great news, especially to prospective first-time residential property buyers, is that the prices most popular among developers in the period surveyed were in the RM500,000-RM1mil price range (47% of developers sampled), above RM1.5mil (11%) and RM350,000-RM500,000 (11%).

And this was before the recent 20 sen fuel price hike, which developers say will likely contribute to pushing prices up by at least 10%. They had already reported rising costs from building materials becoming more expensive, labour shortage and wages.

While the percentage of developers selling residential properties in the RM250,000-RM500,000 price range hovered at around 40% from the second half of 2011 through to the second half of 2012, it was at only 23% in the first half of this year. It is, however, anticipated to inch slightly higher to 25% in the second half.

The majority of properties launched in the period surveyed were priced at around RM500,000-RM1mil throughout the Peninsula, with Kelantan and Perak being the exception.
Perak had four developers launching property in the RM250,000-RM350,000 range; Kelantan saw four who launched property below RM250,000. This pattern will, more or less, hold in the second half.

The most popular commercial properties among the developers are in the RM500,000-RM1mil range – 43% of the developers offered such property in the first half, with 50% expected in the second half.

On a brighter note, the percentage of developers that is expected to increase prices in the second half dropped to 45% from 69%.

BUYERS

Some 41% of developers reported that half of their buyers were first-time homeowners.

Local buyers outnumbered foreign buyers at 95% against 5%. These locals bought predominantly for the purpose of self-dwelling (62%), followed by for investment (28%), for family members (7%) and for rental yield (35%).

Some 55% of the developers reported unsold units, with 16% saying their cash flow were severely impacted as a result. These are the ones who had upwards of 21% unsold units, all the way to above 50%.

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